Ukraine slapped with €1,000 bank withdrawals limit

KIEV, Friday

Ukraine's hryvnia currency rebounded on Friday from record dollar lows after the crisis-hit nation's central bank slapped a daily limit on cash withdrawals and reached out to the IMF amid simmering international tensions.

The fast-moving Ukrainian crisis weighed on many European stock markets, which pulled lower amid fears of a potential wider conflict in the region.

Investors also digested a mixed session in Asia after Federal Reserve chief Janet Yellen provided an upbeat view of the US economy -- and hinted the central bank could ease up on its stimulus taper if the growth outlook weakens.

In a crisis measure, Ukraine's central bank capped cash withdrawals to 15,000 hryvnia (1,095 euros, $1,400) per day, in the latest sign of the desperate state of national finances and a run on bank accounts.

The news came one day after Ukraine requested financial support from the International Monetary Fund (IMF), as Kiev struggles to emerge from a bloody political crisis amid heightened tensions with Russia.

LOAN REQUEST

The national hryvnia currency rose to 9.1800 against the dollar, having plunged to a historic low of 11.3075 on Thursday.

"Although the move by the central bank to limit foreign currency withdrawal seems to have propped up the currency, we think that the global show of support for Ukraine, especially from the US, and the IMF loan request are the bigger drivers of hryvnia strength today," said analyst Kathleen Brooks at trading site Forex.com.

"Capital controls tend to be currency negative, while having the US on your side when you face a formidable force like Russia is likely to have a bigger impact.

"A pullback from record lows versus the dollar is to be expected, especially now that imminent bankruptcy looks like it has been avoided."

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